When you’re running a business, you must be extra careful with who you hire. You need someone productive but also someone who gets along with the rest of the team. You can’t afford to spend your time fixing human relationship issues with clients and deadlines breathing down your neck.
The problem is, avoiding toxic workers is easier said than done - especially when you take into the fact that toxic workers are on average more productive than others. This puts every entrepreneur in a tough position: should I turn down the the person who brings results because they are a terrible fit, or should I hire them and hope their productivity will offset their bad attitude?
Well, according to research done by Harvard Business School, you should turn them down as they’re gonna cost you more in the long run - $12,500 more, to be exact.
Who are toxic workers
Toxic employees are talented and productive people whose behaviour is ultimately harmful to an organization. They’re difficult to talk to, they gossip, make others feel inferior, aren’t welcoming to new team members. It’s stressful for other employees to work with them, and others generally feel uneasy in their company because they always have to keep their guard up. They poison the atmosphere and kill collaboration.
If they’re so bad to work with, why are they hired? And more importantly, how do they stay employed? The answer is very simple - they hit their numbers. If they didn’t, it would be easy to fire them; but when they actually bring in the results, it’s a different story. According to research, only 1 in 20 workers is fired for toxic behaviour.
Harvard Business School specifically did a research on toxic workers that encompassed 11 global companies and 58,542 workers. They found that a worker is more likely to be toxic if they’re overconfident, self-centered, productive, and rule-following.
The research also found that other people, when exposed to toxic workers, are 46% more likely to be fired for misconduct. In other words, toxicity is contagious.
When exposed to toxic workers, people are 46% more likely to be fired for misconduct.
The trouble with toxic workers
The main reason why toxic employees persist is that they’re more productive and more likely to be a superstar (meaning, they’re in the top 1% in terms of productivity). This is why toxic workers are recruited and remain in company for a long time. According to research, unethical workers enjoy longer tenures. An unethical trader might bring in millions of dollars so the firm is tempted to look the other way as long as the trader doesn’t overstep legal boundaries.
Toxic workers are more productive, but that comes at an expense. They trade work quality for speed. On the flipside, a worker is 27% less likely to be toxic if they do quality work.
A company might be tempted to hire a toxic worker in hopes their productivity will offset the downside, but that’s not the case. It turns out, avoiding a toxic worker is worth more than hiring a superstar: a superstar only adds $5,300 to the bottom line, while avoiding a toxic worker saves you $12,500 in turnover costs.
Jack Welch (a former CEO of General Electric during whose tenure the company’s value rose by 4,000%) once classified all workers into four types, based on two attributes: results and values.
He advised to keep those who deliver results and share company values (1), fire those who don’t (3), and work with those who share values but miss their numbers (2). But type 4 workers, those who deliver results but create toxic environment, are a problem.
It’s unnatural to fire them because they get the job done. Jack Welch decided to make the tough call and remove them because type 4 workers had the power to destroy the positive culture that’s critical to business success. By doing this, he showed that soft values are truly valued and not just empty words written in the company’s codex.
Be careful though. Jack Welch also said that a workforce consists of 20% of people who are high performers, 10% who you should get rid of, and 70% who do ok. This forced ranking can do a lot of harm because managers focus on workers who are high performers and believe the other 70% are underperformers, which is not true.
Companies need to appreciate the competence of the masses and not chase the superpowers of the elite because when it comes to building a stable business than can grow, it’s the people who do ok who are the most important. They are the backbone of every big company because they are both reliable and replacable.
What to do with toxic workers
Bad workers have a stronger effect on the bottom line than good workers. If a workers is a bad fit, they’ll be terminated prematurely and the cost of finding and training a new worker will be high. That’s why you need to be extra careful when selecting new hires and turn them down even if their work is strong. All their expertise won’t matter much if your team can’t collaborate efficiently and quit their job.
The first step to avoiding toxic workers is to prevent hiring toxic workers in the first place. When interviewing new candidates, don’t ask solely skill-based questions. Ask questions that can help you gauge if they are a team player.
The best way to assess that is by asking questions like:
“Can you recall the last time someone asked you for help and what did you do?”
“Can you give us an example of a great team work at your previous company?”
What to do if you already have toxic workers? First you have to identify them. If you’re a business owner who doesn’t spend too much time in the office, you’re most likely oblivious to who makes others miserable because all you see are great results. Current workers won’t tell you either because they don’t want to badmouth others.
The only way to learn the truth is through exit interviews. When someone leaves saying they need to be in “a more challenging environment with more professionally-minded people who support each other”, take that as code word for “the work environment is toxic and I can’t take it anymore”.
Getting rid of toxic workers is difficult. You can’t just fire them - it’s bad for morale, legally risky, and you can’t afford to lose productivity. The best course of action is to slowly drive them away by introducing changes to the workplace. You can introduce team buildings, pair programming and code reviews, processes, and other activities that require teamwork and support.
Also, bringing in new people can do wonders for the work atmosphere, especially if you bring in a lot of new people. This gives you the chance to mould the right culture. The toxic worker will have to either adjust or decide on their own to leave.
Other posts in the series on growing a business
- Part 1: Why entrepreneurs burn out
- Part 2: How to make sure your business can grow
- Part 3: How companies grow and die (Adizes lifecycle)
- Part 4: Setting up a self running business
- Part 5: Introducing processes
- Part 6: Staying relevant
- Part 7: Staying profitable
- Part 8: How management changes (Greiner's growth model)
- Part 9: When to hire first project manager
- Part 10: A practical approach to risk management
- Part 11: Identifying key players
- Part 12: What happens when a key player leaves
- Part 13: Leadership pipeline
- Part 14: When to hire first HR manager
- Part 15: Contractor vs full-time employee
- Part 16: Hiring process for growing businesses
- Part 17: How and where to find talented employees
- Part 17: Hiring advice for growing businesses
- Part 18: Systematic onboarding
- Part 19: Avoiding toxic workers
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Total Business Re-Configuration
Management and You
Crash Course in Talent Management